MRP II systems extend MRP I systems by adding other planning processes, such
• financial requirements planning
• labour scheduling
• equipment utilisation scheduling.
MRP II has been defined as ‘a game plan for planning and monitoring all the
resources of a manufacturing company: manufacturing, marketing, finance and
The advantage of MRP II over MRP I is that by integrating these additional
planning activities, planning throughout the organisation is co-ordinated.
Optimised production technology (OPT)
OPT computer systems were developed in the 1980s by Eli Goldratt. The OPT
approach is based on his Theory of Constraints.
The Theory of Constraints is that production output is optimised by focusing on
the constraints that restrict production activity. The capacity of a production
system is limited (constrained) by one or more bottleneck in the system
Concepts in OPT
It is useful to understand some of the main concepts in OPT.
1 A bottleneck or key constraint limits production capacity for the entire
2 Losing time in a bottleneck activity means time lost – and output lost – for
the entire production system.
3 However, saving time in a non-bottleneck activity is a wasted effort,
because it has no effect on output.
4 There is no reason to produce items faster than a bottleneck activity can
use it. Producing items at a faster rate than they can be used simply means
that inventories will increase.
5 Inventories are wasteful and expensive. They add no value.
6 The process batch sizes should be variable, to optimise throughput, and
should not be a fixed or standard size.
Enterprise resource planning (ERP)